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>The US has the unique ability to tax wealth globally via the dollar

Cool thought, and sounds pretty good as someone who lives in the US. Guess there are certain perks to being the world superpower.

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This works fine but you can only do it if there are large foreign reserves of your currency. Now, since foreign reserves of USD are massive, we can print a lot of money (relatively) before it becomes a problem, but it isn't like this exempts you from market effects. The reason foreign reserves of USD are so high in the first place is that we usually do this very little.

The US also has to keep the USD a just-safer investment than other world currencies, held by other governments with their own issues. As long as USD is the safest investment, the US will never default. Don't outswim the shark, just the slowest swimmer and all that.

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